Written by admin

Market Relieved At Fed Chief Selection

The broad market rallied today. Volume on both exchanges was light. Wilma spared the gulf, oil prices drop. When will we know if today’s advance will stick? Always look for volume validation. Click here to get today’s free options advice; have A.J. explain option trading to you in everyday language.

Hey trading team,

This is A.J. on Monday, October 24th with your Trading Trainer web log. We are your home of market insights for the serious options trader. This web log will cover the events in the market from today as well as prepare you for watching the market tomorrow.

Not much for me to say today in my opening comments. The market went crazy ape bonkers, for lack of a better phrase, over the nomination of the new Fed Chairman. But team; look closely at what happened to see what the market was so excited about.

Here’s what I want you to look past the price gains to see. First I want you to look at what happened in the bond market. The 10 year long bond’s yield shot up 6 basis points. What does that mean? It means the market believes the new chairman is hawkish about raising interest rates. Second I want you to look at the volume. Rather than the volume increasing to show a sign of support or validation for the price movement, it actually declined by a lot. What can we infer? Perhaps that although the broad market masses endorsed the new Fed chief nomination, the more important institutional traders are skeptical.

Here might be a better take on what happened today. The U.S. market is very jittery right now. There is a lot going wrong fiscally with the U.S. government right now and everyone knows it. The market watched how the latest U.S. Supreme Court nominee was picked and was recoiling in fear that a similar strategy might be used to select the new Fed chairman. Instead, the gentleman that was selected was the one that was expected. So, today’s rally seems really more a sign of relief that something went as expected. The rally does not seem to be a vote of support. We’ll see how the week and the months leading up to Greenspan’s departure go before we draw our conclusions about how the new U.S. Fed chief will be perceived.

My Techne January 55 Call closed up with a bid price of $4.20 per option. I’m drawn down by 30% into my initial investment after 20 days. My Apple January 55 Calls closed up with a bid price of $5.40 per option. My return on invested capital is 10% after 4 days. My Google December 310 Calls closed up with a bid price of $44.00 per option. My return on invested capital is 212% after 4 days.

Here is my recommendations team. We need to be leery of today’s price increase on minimal volume. And we need to be aware of the consumer confidence report that is going to be issued tomorrow. Once the morning has passed, we will be able to see where the market will go. Look for volume to validate any movement.

Most importantly have tight stop loss on your trades with high profits already. And, set stop loss alerts at break even for trades with just a little profit. That’s my strategy for Google and Apple.

Okay, team. I’m done.

Till tomorrow, happy market watching, trading and money making. Trading
Trainer is here helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear the blog as an audio from A.J. himself!

Do you want to learn option trading? Full time options trader, A.J. Brown, reveals option trading secrets in his daily audio / video newsletter that are guaranteed to make you massive profits in less than 30 minutes a day. Visit TradingTrainer.com now.

~> You may reprint or distribute this article as long as you leave the content, the links and the resource box at the end intact. <~

Categories: Blog

Leave a Reply




Video: Covered Call Writing  

Learn How to Write Covered Calls

In this series of 6 videos, I show you how to execute my covered call writing strategy from start to finish. Watch the first video instantly when you click for more information. Click for more »